The Speculation Era and Its Bust: A Named Buyer, a Paper Town, and a State That Went Broke

1835–1841: the promotion, the Panic of 1837, and the slow local measure

The first buyer, named: The townsite was not bought by a syndicate on paper. It was bought by a man. The town's own Discover New Carlisle history records that in 1835 Lazarus Bourissa's 160 acres were purchased by Richard Risley Carlisle and the name was subsequently changed to New Carlisle; the standard town history adds that Carlisle had come from Philadelphia and that he platted the town under the name New Carlisle in 1835, on ground first known as Bourissa Hills, and that the New Carlisle post office has been in operation since 1837. What published record does not supply is a course of eastern lot sales, resales or foreclosures for this ground; that limb's settler is named at the end of this article.

The bust, at state size: The speculation era in Indiana did not end in a local embarrassment; it ended in the state's near-bankruptcy, and the frame is documentary. The Mammoth Internal Improvement Act, signed by Governor Noah Noble in 1836, added 10 million dollars of borrowing on top of more than 2 million already borrowed, for turnpikes, canals and later railroads, at a time when the state's regular revenue, primarily from property taxes, was less than 65,000 dollars a year and the new debt alone equalled one-sixth of all the wealth in the state; most of the money was raised by mortgaging nine million acres of state-owned land through agents of the Bank of Indiana to creditors in London and New York. Then the Panic of 1837, caused primarily by western land speculation, hit. By the figures the published record gives: in 1838 the state's taxation revenue was 45,000 dollars against 193,350 dollars of interest on its growing debt; in 1839 the Morris Canal and Banking Company, which had taken the bonds on instalments, failed to pay, and construction stopped on everything except the largest canal; by 1841 the government could no longer make the interest payments, and all the projects except the largest canal were handed over to the state's London creditors in exchange for a 50 percent reduction in debt; in 1846 the last project was handed over for another 50 percent reduction. Of the eight projects in the measure, none was completed by the state.

The local measure of the bust is a headcount, not a headline: No published narrative found in this section — searching the town's published histories, the county histories and the state's internal-improvements record — tells a Panic-of-1837 course for New Carlisle itself: no lot-sale collapse, no named defaulting buyer, no resale wave in print. What the record does give is the town's resulting size. The federal census series for the town begins in 1880 at 530 people, forty-five years after the plat; the town counted 1,891 people in the census of 2020. A town platted in the boom year of 1835, on one of the state's great roads, that stood at 530 people in 1880 is the bust's local evidence at its true size: not a dramatic ruin, but four decades of near-stillness while the state's credit, its canal system and its paper towns were worked out in the creditors' hands.

The named settler for the untold limb: The Panic's course on this specific ground — who bought promotion lots, who defaulted, what was resold and at what loss between 1837 and 1842 — lives, if anywhere, in the St. Joseph County deed books and the county's 1837–1842 tax and mortgage record, held at the county level; the Indiana Archives' land-records guidance states that all transactions after a first purchase from the public domain are the responsibility of, and held by, the county. Until those books are read, the honest statement is the one printed here: the promotion is banked, the state's collapse is documented, the town's slow course is counted, and the town-level resale story is a named gap, not a story to be invented.

Sources:

1. Discover New Carlisle, “History & About Us” (discovernewcarlisle.com): Bourissa's 160 acres purchased by Richard Risley Carlisle in 1835, the name changed to New Carlisle, and the town's position on the Michigan Road.
2. New Carlisle, Indiana, town history summary: originally Bourissa Hills, named for Lazarus Bourissa; platted under the name New Carlisle by Richard Risley Carlisle, who had come from Philadelphia, in 1835; post office in operation since 1837.
3. “Indiana Mammoth Internal Improvement Act,” summary of the 1836 act and its collapse: 10 million dollars added, over 2 million already borrowed, annual revenue under 65,000 dollars, debt equal to one-sixth of the state's wealth, nine million acres mortgaged through the Bank of Indiana to London and New York creditors, 1838 revenue of 45,000 dollars against 193,350 dollars of interest, inability to pay interest by 1841, projects handed to creditors for successive 50 percent debt reductions in 1841 and 1846, and none of the eight projects completed by the state.
4. Doug Masson, “The Indiana Mammoth Internal Improvement Act of 1836,” Indiana Bicentennial citizen's-guide series (masson.us, 2016): the Internal Improvement Board, the Morris Canal and Banking Company instalment arrangement, Morris's failure to make its instalments in 1839, construction stopped, and Indiana unable to pay bond interest by 1841.
5. Historical population table for New Carlisle, Indiana, from the federal censuses: 530 in 1880 and 1,891 in 2020.
6. Indiana Archives and Records Administration, “Land Records” page: all land transfers after the first purchase from the public domain are held by the recorders of the individual counties.
7. Banked record for this section, as supplied in this section's register: the 1837 lithographed promotion plat circulated in the East, and prairie holders Reynolds, Clark and Ranstead with 7,433 acres by 1880.